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Demographics

For the past several years I’ve been trying to alert leaders to an impending existential threat to their organizations. I no longer feel the need to do that because it’s no longer impending. The danger is upon us and if you still don’t know what it is then frankly there is little long-term hope for your organization.

Hopefully you’re at least in the group who has the feeling that it’s harder to find people than it used to be…what you need to know is that it’s not just a feeling, it’s a very serious threat to the very existence of your business or organization.

The threat I’m talking about of course is the significant shrinking of the available workforce. Upwards of 10,000 Baby Boomers a day reach retirement age and they are being replaced by a much much smaller number of millennials. Even with the Centennials, iGen, Generation Z or whatever you want to call them joining the workforce very soon it won’t be enough to replace all the retiring boomers.

With all due respect (if they still deserve respect) to the politicians who are claiming credit for the near historic low unemployment rate in the United States it has little or nothing to do with their efforts. It’s all about demographics.

The math is simply and it does not lie.

One of the worst mistakes a leader can make today is to assume that their key people are not vulnerable to offers from other organizations simply because they provide a fair wage and a good work environment.

Everybody, I repeat everybody, wants something and if you’re not working diligently to provide your people what they want then rest assured some other organization will.

I could go through a long list of what your people might want but “might” doesn’t get it done. You need to know precisely what each of your people want and you need to know it before they are offered it by someone else.

That’s why I’m such a proponent of “stay interviews.” Conducting an exit interview to discover why you’re people are leaving is of little use when compared to conducting a “stay interview” to determine how you can keep them.

Sometimes when asked in a “stay interview” your people may say that “everything is fine” or that they don’t really know what they want. If that’s the case then it’s your job as a leader to help them discover what it is that they want, what it is that will help them stay motivated to remain a part of your organization. Then it’s your job as a leader to deliver it to them if it’s at all possible.

I absolutely promise you that if you don’t do that someone else eventually will and it’s getting more likely that it will be sooner rather than later.

The number of small businesses closing their doors or hanging on by a thread due to lack of an available workforce is beginning to grow. It is already spreading to larger organizations. If you’re in business then you’re in the people business. If you’re in the people business then you’re going to need to fight for your piece of a shrinking workforce.

The fight begins by not losing the people you currently have.

I truly do not have the vocabulary or writing skills to convey how serious an issue this is becoming for all businesses and organizations. The demographics are just crystal clear!

There are a limited number of larger companies who had the vision and forethought to get out in front of this threat and develop programs to retain their people and even recruit new ones. While that’s good for them it makes the situation even more critical for those organizations behind the curve.

The answer to the question that makes up the title of this post is YES! Your key employees are a flight risk. Even if they are not looking to leave there is another organization out there who will try to entice them to do just that. You need to covet them as much or more than the organizations that don’t have them….yet.

Oh, one more thing before we close this out…. if you have an employee who isn’t key to your organization then what the heck are they doing working for you?

Pretty much every business in the world does some sort of occasional “threat assessment” to determine areas of their business where they could be vulnerable. Most of these assessments are externally focused and while that is obviously important they miss the single greatest threat to their future. It’s a threat so severe that in many cases it threatens the very existence of their business.

The threat they miss comes from the rapidly changing demographics of the workforce.

Roughly 10,000 Baby Boomers reach retirement age every single day. The majority of them retire either a little bit before the age of 65 or a little after. 25% of boomers say they will need to work well past retirement age but many of those say they will significantly scale back their work hours.

If we assume the age of 65 as the average retirement age then 10,000 Baby Boomers are leaving the workforce everyday. Every single day.

They are replaced by far far fewer Millennials.

That’s the textbook definition of a problem. A very serious problem.

In the trucking industry alone, for example, it’s estimated that there will be a shortage of over 100,000 drivers in just the next couple of years. The Millennials who replace boomers will have far less experience and know-how, and will need considerable training to get up-to-speed. This will lead to significant gaps in areas such as engineering, utilities, manufacturing, education, healthcare, and many many more professions. The majority of the less desirable manual labor jobs, even skilled positions like mechanics and service technicians will become increasing challenging, if not impossible, to fill.

Just as important for leaders is the need for awareness as to just how differently Millennials will behave. Millennials significantly differ from Boomers in a number of ways: They want, actually need, more feedback and attention, and prefer the instant gratification of texting to the slower response of email; they prefer casual attire so they can just be themselves at work; they want tons more flexibility with scheduling and work location; they value the importance of their work over pay and benefits; and they want to be involved in strategy and not just told what to do. (It’s important to keep in mind when discussing generational differences that we’re discussing “generalities,” it’s just as unfair to “pigeonhole” the Millennial generation as any other)

None of this makes Millennials harder to work with or more challenging to lead, it just means a shift in leadership thinking.

The differences however won’t matter one bit if you’re not proactively planning for the demographic change in your workforce. You won’t need to worry about how to lead a Millennial because you’ll be so far behind the curve that they would never join your organization in the first place.

The threat posed by the changing demographics is so severe that your next threat assessment (or whatever you want to call it) needs to be focused almost exclusively on the internal workings of your organization. Conduct a demographic risk-analysis of your team. What knowledge and skills are likely to leave your organization in the next five years and how will you replace it.

To be clear, this is not your yearly process for assessing talent and creating succession plans, this is an almost person by person detailed assessment of strength areas that lead to the eventual determination of whether or not those strengths will be required in the future.

If it’s determined that they will and those strengths are held by a Boomer then you have identified a threat.

If you intend to be in business 15 or 20 or perhaps even 10 years from now, you must develop a sense of urgency around this threat today. There are only so many people to fill the positions you need filled to sustain your business, you are right now, this very day, in competition for an ever shrinking talent pool. It makes no difference if your business is big or small, everybody is in the same boat.

If you’re alarmed at the tone of this post then that’s great, you have received my message in the manner in which I intended.

I fully understand the difference between a real threat and an irrational apocalyptic kind of threat. This threat is the real kind, VERY very real; the numbers just don’t lie. If you disagree then I wish you luck cause you’re going to need it.